Use of Disparate Impact Remains in Question as HUD Considers Change Which Could Affect Tenant Screening, Opines

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The use of Disparate Impact theory as a legal tool has come under question and the Department of Housing and Urban Development continues to review its potential use in discrimination cases. Adam Almeida, President and CEO of, opines: “Disparate Impact in practice has been challenged and ruled upon in the Supreme Court, and the current review by HUD regarding its use as a tool to fight discrimination could ultimately result in substantive change in tenant screening, one landlords and property managers should be prepared for immediately.”

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Recently the Department of Housing and Urban Development began a review of the use of Disparate Impact as a legal apparatus in cases of discrimination as related to housing. Adam Almeida, President and CEO of, opines: “Currently more and more entities are commenting on how HUD should look at disparate impact and, subsequently creating enough confusion that landlords and property managers should work with well-qualified third-party tenant screening agencies to fully understand and comply with any potential law as related to HUD’s decision.”

Recently HUD decided to review the use of Disparate Impact as a legal tool often utilized in legal actions related to housing. Currently some groups feel HUD’s policies are out of alignment with recent Supreme Court decisions.

From (Aug 21, 18):

CUNA followed up its letter last week to the Department of Housing and Urban Development (HUD) with a joint letter reiterating the call for HUD to align the 2013 disparate impact final rule with the standards established by the U.S. Supreme Court.

HUD’s 2013 disparate impact rule codified HUD’s interpretation that the Fair Housing Act (FHA) creates liability for practices with an unjustified discriminatory effect, even if those practices were not motivated by discriminatory intent. (1)

Policies related to the use of the legal theory of Disparate Impact may remain combative as Attorney’s Generals in several states align in opposition of potential changes HUD could implement.

From (Aug 27, 18):

Meanwhile, 17 state attorney generals have joined together in support of retaining the Department of Housing and Urban Development’s (HUD) Disparate Impact Rule that protects people against lending practices that do not mention race, color, religion, national origin, sex, disability or familial status, but produce a discriminatory effect. (2)

Proponents of change continue to make comments known.

From the National Law Review’s webpage (Aug 30, 18):

The American Bankers Association jointly with state bankers associations, the American Financial Services Association, and the Mortgage Bankers Association are urging the U.S. Department of Housing and Urban Development (HUD) to make significant changes to its 2013 Disparate Impact Rule (Rule) in light of the 2015 U.S. Supreme Court ruling in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. The trade groups’ views are set forth in comment letters submitted to HUD in response to its advance notice of proposed rulemaking seeking comment on the need for revisions to the Rule following Inclusive Communities. The ANPR’s comment period ended on August 20. (3)

Almeida opines: “Protection against discrimination remains a critical and most important task of HUD. The outcome over the use of Disparate Impact could greatly affect landlords and property managers, and it is incumbent on those individuals to be fully prepared from any change to laws governing tenant screening and other activities as related to housing. Landlords and property managers should immediately ensure current policies are fully compliant with law by working with a well-qualified third-party tenant screening agency.” is a third-party tenant screening company available to provide all the data and information a property manager requires in making a sound decision on a potential tenant, both traditional and vacation. With a well-trained and highly dedicated staff, can compile data and provide essential reports required to make a well-informed tenant selection decision.


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Dan Adams